A Beginner's Guide to Requests for Proposal (RFPs)

It's not the most glamorous part of a project, but the request for proposal process is where your project succeeds or fails -- even before it begins.

Get the RFP process wrong, and you risk hiring an unqualified contractor without the skills to complete the project or with an unrealistic plan that causes your project to be heavily delayed and way over budget. By putting a lot of effort into the RFP process, you protect your project from disaster.

Managing RFP bids requires good document control, and it’s a key part of project planning. This guide will describe what the RFP process is and how to put it to work for you.

Overview: What is a request for proposal (RFP)?

A request for proposal is a document businesses use to formally announce a project and solicit bids from contractors to demonstrate their willingness and ability to complete it to the client's satisfaction.

The RFP provides the details about a project, allowing contractors to create a bid proposal describing how they will complete the project and how much they would charge. Beyond project specifics like labor or materials used, RFPs may also include extra details such as the financial health of the bidder.

How the request for proposal (RFP) process works

The RFP process can be broken down into four basic steps.

1. Lay out requirements: The first steps in any RFP process will be to define the requirements and goals of the project. Be clear about the purpose of the project, what goals you are trying to accomplish, how you will measure success or failure in the project, and any other details important to you and the contractor -- such as any licenses they need to have or relevant experience.
2. Draft and post the RFP: With this information in hand, you will draft an RFP document. You may opt to refine the RFP a few times after getting feedback from contractors -- it depends on the complexity of the project and what you’re comfortable with. Once you have an RFP you think is the best it will get, put it out there for contractors to bid on.
3. Evaluate bids and create a shortlist: As you get responses, you can begin to weed out potential vendors. You'll get submissions from those that do not meet basic needs, or provide an unrealistic timetable, or give you a cost estimate that doesn't work. As you go through this process, you'll identify contractors that appear to meet the basic requirements and draft a shortlist of qualified vendors you will choose from after a deeper evaluation of their bids.
4. Make a final decision: With a shortlist in hand, it's time to make your final decision. Analyze each vendor. Ask some basic questions. What does their track record look like? Does their experience make them a good fit for this project? Are they financially healthy? Is their bid sufficiently detailed and realistic? Is their estimate one you can afford? Does it look like they’re presenting an unrealistic estimate to win the contract? Once you've answered these questions, choose a vendor and award the contract.

What should you include in a request for proposal (RFP)?

The RFP should include seven basic elements:

1. Project overview and background: Provide a broad overview of the project and what you hope to accomplish. Include background information on your company.
2. Bid proposal details and requirements: Describe how you expect bid proposals to be formatted, when they should be submitted, and what should be in them.
3. Project scope and goals: Go into more detail on the project, including what specific goals you expect the contractor to accomplish and what the overall scope of the project is.
4. Schedule: Lay out a basic schedule on when you expect the vendor to complete the project. You may adjust this based on the RFP responses you get, but this will give the contractor a ballpark estimate of your schedule.
5. Budget: Like the schedule, your project budget may shift based on what contractors are telling you in their bids. However, it helps to inform them of the budget target you're hoping they can hit.
6. Potential obstacles: Identify any obstacles a contractor may run into during the project that risks delaying the project or increasing the total cost.
7. Special requirements: Include other special requirements, such as permits or licenses they need to have, financial health information about their company, or anything you consider relevant to this project.

Example of a request for proposal (RFP)

The RFP will vary depending on your industry and the type of project you need help with. However, lots of RFP templates and proposal outlines can be found online, whether you’re trying to do a private bid proposal or a government RFP.

For example, one RFP template I found shows a simple one-page document. It has the title of the project, the submission deadline, instructions on submitting questions, and other details that deal with the beginning portion of the RFP process.

Others are more in-depth and span multiple pages. They reflect more outside feedback and involve more complexity.

RFPs are varied, so explore as many templates as possible and select one that best fits your project.

Use software to manage the RFP process

The RFP process is complex and easy to get wrong, so use software to help you do it right. A document management system can help you with records management, legal paperwork, and generally ensuring your business documents are in order.

Whether you're dealing with government bids or work exclusively with the private sector, a well-managed RFP process will help you get more projects done on time and on budget.